Key Moments:
- DraftKings (NASDAQ: DKNG) reduced its 2025 EBITDA target to $450 million-$550 million, with revenue guidance set at $5.9 billion-$6.1 billion
- The updated projections account for launching mobile sports betting in Missouri and DraftKings Predictions
- The company’s share repurchase authorization has doubled to $2.0 billion as of August 2024
Financial Outlook Revised for 2025
DraftKings (NASDAQ: DKNG) saw its stock decline in Thursday’s after-hours trading after announcing downward revisions to its 2025 financial targets. The online sportsbook operator now expects adjusted EBITDA between $450 million and $550 million and revenue of $5.9 billion to $6.1 billion. Previously, management projected EBITDA of $800 million–$900 million and revenue of $6.2 billion–$6.4 billion.
The company attributed these lower figures to the anticipated rollout of mobile sports betting in Missouri later this year and the pending launch of DraftKings Predictions. That product remains contingent on receiving the required licensure. However, analysts note that industrywide pressures—especially customer-friendly results during recent NFL games—have also weighed on guidance.
Share Repurchase Program Expanded
DraftKings has witnessed its shares drop by 20.57% over the last month, sparking significant discussion among retail investors. In response, DraftKings has moved to reassure shareholders by expanding its repurchase program. Following the recent acquisition of Railbird Technologies, which supports the anticipated DraftKings Predictions product, the company has doubled the previously announced share buyback program from $1.0 billion to $2.0 billion, effective August 2024.
“We continue to focus on maximizing shareholder returns and are pleased to announce that our board authorized an increase in our share repurchase program from $1.0 billion to $2.0 billion,” said CFO Alan Ellingson in the press release.
The timing of this expanded buyback is viewed as significant by investors, particularly with shares trading at lower levels and share issuance involved in the Railbird Technologies acquisition.
Attention on ESPN Partnership and Capital Strategy
DraftKings’ latest earnings announcement did not address its recently reported agreement with ESPN, where DraftKings will become the network’s sportsbook partner, taking over from Penn Entertainment (NASDAQ: PENN) for ESPN Bet.
“DraftKings will also play a major role across ESPN’s digital platforms. DraftKings will power the betting tab within the ESPN app and their customers will receive special promotions for ESPN Unlimited, ESPN’s newly launched direct-to-consumer product,” according to the companie.
Market watchers are expected to monitor DraftKings’ capital commitments related to the ESPN relationship and any potential shareholder dilution resulting from new equity issuance.
DraftKings 2025 Financial Guidance (Current vs. Previous)
| Metric | Current Guidance | Previous Guidance |
|---|---|---|
| Adjusted EBITDA | $450 million – $550 million | $800 million – $900 million |
| Revenue | $5.9 billion – $6.1 billion | $6.2 billion – $6.4 billion |
- Author
Daniel Williams
